Financial Analyst Urges Insurance Companies to Deepen Penetration

Retired bank treasurer, Chief Donatus Mohammadu has charged Nigerian insurance operators to use innovative ideas and strategies to deepen the penetration of the industry to complement the banking sector reforms and in mobilizing resources for economic growth. Mohammadu who is now into private consultancy, stated that the insurance sector is seen as a major vehicle for domestic resource mobilization and facilitates accumulation of medium to long-term stable funds for investments in the economy.
He told our correspondent that available figures show that insurance penetration in the country has been very low, growing at a rate of less than 1.2 percent, an indication that the penetration rate of the industry is still a far cry of what is expected to substantially propel the economy. He reiterated the popular stand of industry watchers that many households are not taking advantage of the products and services those insurance firms provide against unforeseen difficulties that could disrupt their lives.
He charged operators to pursue policies and programs aimed at developing a vibrant financial system capable of harnessing financial resources for the development and growth of the economy, especially coming on the heels of current banking reforms. He acknowledged that there was already in place, a “healthy working relationship between the banking institutions and insurance companies,’ adding that he was ‘confident that this cooperation will be deepened to enhance performance of the banking and the insurance sectors to support development of the over all national economy.”
He urged the regulatory bodies in the financial services sector, especially the Central Bank of Nigeria (CBN) and the National Insurance Commission (NAICOM) to collaborate at this crucial time of reforms so that the insurance industry will not be left out of emerging gains. He tasked operators to provide an immense opportunity to reach more households and businesses with suitably designed and priced products that can protect them from the financial difficulties that are associated with the rising harsh living conditions, occasioned by the poor economic growth. He joined industry watchers in calling for a localized products profile that takes the peculiar Nigerian situation into consideration. These he said should be backed up by aggressive enlightenment campaign aimed at changing the insuring public perception that insurance is a luxury and not necessity.